A real-time system does not have to answer this question at all... never!

Why? Because a real-time system or interface updates the applicable information as the transaction occurs. No pre-authorization mark-up, no memo-posting, no positive balance file, no end-of-day batch update. No download, no extract, and no ingesting!

No and none!

The open secret of banking

The puzzling aspect of our banking technology is the fact that most of our financial systems are not real-time at all.

Of course, through various gyrations we can create a perceived real-time system, but in reality, they are not.

Take, for example, stand-in debit card processing. It is not real-time, but more like a risk management system based on prior customer history. Set a stand-in limit and hope the system comes up before the limit is hit!

Memo-posting means that we will hard-post later. But when was the last time you checked the balances on your various systems and found that the internet bank application, mobile banking application, ATM system, and teller system all had different balances at the same time? And that none of them reflected the remote deposit the customer just made, the pending ACH debits or credits, nor the billpay transaction that will be posting tonight?

(And you wonder why the customer becomes frustrated?)

Fictional, but people expect it

In the context of the contemporary and connected customer, they expect that the online system of their financial institution is truly reflective of their real balances. Also, if you think that a customer, for the most part, balances their account using a checkbook register, you're wrong. When they look online, they expect to see all of their transactions posted.

The community of community financial institutions really has to update their thinking on technology and real-time systems. The processes described earlier just don't fly in light of connected society.

And expectations are growing.

Current Strategy — Future Strategy — Federal Reserve

No community financial institution should make a technology decision without first establishing a real-time strategy and how their current and proposed vendors are going to ensure that all transactions, regardless of system, are capable of real-time processing.

The Federal Reserve recently released the work of the Faster Payments Task Force, and collaboration has begun under a published framework to move the payments system forward.

Community financial institutions should not wait on the sidelines waiting for the outcome to become obvious before committing to updating their systems or holding their vendors accountable.

The time is now — to become involved and to engage with all of your vendors regarding what specific work they anticipate with the framework, what resources they have committed, and what timeline they envision for implementation. The real-point is they do not have to wait for the FED, they can begin moving their system forward now.

Dan Fisher is president and CEO of The Copper River Group, a consulting firm headquartered in Fargo, N. D., that focuses on technology and payment systems research and consulting for community financial institutions. For nearly 30 years, Fisher has worked in the financial industry using technology to improve the bottom line. He was CIO of Community First Bankshares (now part of Bank of the West), has served as a director of the Federal Reserve Board of Minneapolis, the chairman of the American Bankers Association Payment Systems Committee, and was a member of the Independent Community Bankers of America Payments Committee. Fisher has written numerous articles on banking technology and the payments system. He has authored or co-authored six books and recently published a book titled, "Capturing Your Customer! The New Technology of Remote Deposit." You can contact Fisher at [email protected] or at 701-293-6222.P.S. To understand Dan's nickname, check out "About the Wombat" on his website.